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The City of Portland, Oregon

Planning and Sustainability

Innovation. Collaboration. Practical Solutions.

Phone: 503-823-7700

Curbside Hotline: 503-823-7202

1900 SW 4th Ave, Suite 7100, Portland, OR 97201

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Own or Lease?

A growing number of homeowners are choosing to lease, rather than own, their rooftop solar panels. This trend is being driven by the increased availability of leasing companies and the upfront costs of solar, which are prohibitive for many solar enthusiasts. Homeowners may pay anything ranging from a moderate down-payment to nothing initially, and then pay a fixed “lease” rate for the system over a period of 15 to 30 years. The leaser/installer covers the system costs (and enjoys subsequent rebates and incentives), maintains the system, and collects lease payment from the homeowners. In exchange, homeowners benefit from reduced utility bills and get to have solar on their roof. 

A host of companies have entered the leasing game, led by SolarCity and SunRun — two California companies operating in several states.

The SunRun Model

The SunRun model works like this: Homeowners typically pay several thousand dollars upfront front (though there may be $0 down-payment options), and SunRun installs a solar system on their rooftop. Homeowners then pay a lease fee that varies with the size of the system and the initial down-payment. Homeowners may choose to put more money down up-front and lock in lower rate for the term of the lease, or pay less and spread the costs out over time.

The SolarCity Model

SolarCity’s offer works similarly to SunRun’s model with one key difference:  SolarCity is a full service provider, using it’s own in-house designers, engineers and installers to construct and maintain the systems they own, while SunRun contracts with  independent solar contractors to source, install and maintain their systems.

To Lease is Not To Own

SunRun and SolarCity’s models are fairly representative of the norm. However, it is important to understand that solar leasing programs are not rent-to-own schemes. If you want to own a system, buy it up-front, but if you want to lower your electricity bills with minimal initial investment, lease.

While leasing arrangements will save money immediately, they are not a path to long-term “free” solar electricity that many people seek when installing solar. After the lease term is up, homeowners may choose to renew the lease under a new contract or have the panels removed.

If ownership is preferred, then there are other financing paths, typically bank loans. While ownership can cost more up-front (or in debt) and means more responsibility for the system, it also leads to bigger savings down the road and more control over one’s personal energy future. Solar leasing is a matter of convenience.